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Costs and benefits of the testing protocol for screening donated blood for the HIV-1 virus are evaluated. Estimates are made of the number of HIV-1 infections and cases of AIDS prevented in a year by blood testing, as well as the costs of providing this risk reduction. The risk reduction provided by alternative tests such as the HIV-1 antigen test is also discussed. The value of the risk reduction provided by blood testing is generated utilizing willingness-to-pay value-of-life estimates. The findings indicate that the present testing protocol is cost beneficial and support the FDA decision not to recommend the HIV-1 antigen test for use in donor testing. Policy decisions concerning present and future testing protocols are discussed, and implications for broadening our model to include indirect benefits of donor testing are evaluated.